Cinven has completed fundraising for its first dedicated financial-services fund, collecting 1.5 billion euros ($1.5 billion) in a rare move by a private equity firm to start an industry-focused pool.
The UK buyout firm has reached the final close for the Strategic Financials Fund, which has already made three investments after a longer-than-expected fundraising process. It will focus on insurance, reinsurance, asset-backed specialty finance, wealth management, insurance distribution and other capital-light areas, according to a statement Monday.
The private equity fundraising environment has gotten tougher in recent months after an unprecedented period of growth. Institutional investors are narrowing the number of funds they’re backing and have started shunning some firms without a clear specialization.
The new fund will enable Cinven, which has long expertise investing in financial companies, to pursue smaller targets in the industry. The strategy could put it in competition with European investment firms like Blackfin Capital Partners and AnaCap Financial Partners.
The financial services fund will deploy about 150 million euros to 400 million euros for an average deal, Caspar Berendsen, a partner who heads Cinven’s financial-services team, said in an interview. It will charge lower fees than Cinven’s flagship buyout pools and target a three times money multiple, he said.
Cinven made its first investment through the new fund in 2021, teaming up with Singapore sovereign wealth fund GIC Pte to acquire specialist insurance broker Miller. It partnered with British Columbia Investment Management Corp. in April last year to buy Compre, a specialist consolidator of legacy portfolios of non-life insurance products.
In February, Cinven agreed to buy a majority stake in International Financial Group Ltd., a provider of life insurance and savings products backed by Vitruvian Partners. Cinven already held financial investments in its portfolio before starting the dedicated fund, including the life insurance-market consolidators Eurovita Holding SpA in Italy and Viridium Group in Germany.
The private equity firm was founded in the 1970s to manage pension assets for U.K. coal miners. Cinven launched its first independent fund in 1996 and has raised more than 37 billion euros since its inception, according to its website.
Source: Insurance Journal